German Chancellor Merkel revealed that the review of NATO’s defense spending target of 5% of GDP will be conducted no later than 2029, contradicting earlier official statements suggesting a 2035 deadline following the June 24-25, 2025 NATO summit. Speaking after the summit and responding to a question about Spain’s request for exemption from the 5% goal until 2035, Merkel stated that while alternative solutions could be considered, Spain’s current trajectory toward meeting NATO capability goals is acceptable for now. She emphasized that a formal review will begin no later than 2029, after which it will become clear whether Spain—and other nations—can fulfill their commitments with lower financial expenditure.
This revelation implies that the benchmark for assessing progress toward the 5% target may be moved forward, increasing pressure on member states to accelerate defense spending hikes. Furthermore, as noted by experts, the framework allowing certain defense increases to be excluded from overall spending caps is only set to last through 2028. Starting in 2029, any additional defense spending will count against national fiscal limits, restricting flexibility in public finances.
For example, Greece, which currently spends 3% of its GDP on defense, could reach the 5% threshold by 2028 by raising spending by 0.5% annually without breaching budget caps. However, if Greece extends this increase beyond 2028, each percentage point rise in defense spending would have to fit within the annual budget constraints defined under the upcoming Medium-Term Budgetary Framework (2029–2032).